PwC comments on the latest labour market data

Jing Teow, senior economist at PwC, comments on today's labour market data:

"Today’s data paints a stark picture of the impact of the pandemic and sector lockdowns on workers. Around half a million people in May were temporarily away from their jobs for coronavirus-related reasons and receiving no pay. Total actual hours worked in the three months to May - a better indication of activity given that many workers are on furlough - declined by historic levels, falling 16.7% compared to last year. And while the unemployment rate has remained largely unchanged, that is because large numbers of people out of work are not currently looking for work in this difficult climate, causing economic inactivity to rise. 

"However, the monthly data paints a more hopeful picture with very early signs of recovery. Actual hours worked on a weekly basis showed signs of increasing in May, while the decline in vacancies and the claimant count saw signs of tailing off in June.

"This suggests that the reopening of the economy has had a positive impact. However, for these gains to be sustained, we need businesses to reopen and to make sure there is sufficient consumer demand to sustain that level of activity. The Chancellor’s summer statement last week provides support for the sectors that need it the most. However, reopening the economy comes with risks of a second wave, as we’ve seen in other countries and in Leicester. A subsequent lockdown would be a setback for workers." 

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